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Wikileaks: How Banks Will Continue to Rule the World

Posted by Larry Doyle on June 20, 2014 10:57 AM |

I had a little wind in my sails this morning when I saw a lead article in today’s Wall Street Journal regarding the pathetic investor protection provided by the meter maids at FINRA. While adding a little spice to the mix by commenting on that article, I got blown away by a tsunami coming from another direction.

Let’s navigate.

Not that there was ever any doubt that the major global banks rule the world (and will likely continue to do so), a riveting press release put out just yesterday by Wikileaks confirms this reality. Major props to Yves Smith at Naked Capitalism for bringing attention to the Wikileak press release, Secret Trade in Services Agreement (TISA). The serious students in the crowd will have plenty to chew on and digest in the Agreement.

For those more inclined to study from the Cliff Notes, let’s give thanks to Professor Jane Kelsey of the University of Auckland, New Zealand who brings real transparency to the proposed Agreement in her Analysis Article also released by Wikileaks

(editing in format by LD)

This memorandum provides a preliminary analysis of the leaked financial services chapter of the Trade in Services Agreement (TISA) dated 14 April 2014. It makes the following points:

1. The secrecy of negotiating documents exceeds even the Trans-Pacific Partnership Agreement (TPPA) and runs counter to moves in the World Trade Organization (WTO) towards greater openness: 

— The cover sheet records that the draft text will not be declassified until 5 years after the TISA comes into force or the negotiations are otherwise closed.

— Secrecy during the negotiation of a binding and enforceable commercial treaty is objectionable and undemocratic, and invites poorly informed and biased decisions. Secrecy after the fact is patently designed to prevent the governments from being held accountable by their legislatures and citizens.

2. The TISA is being promoted by the same governments that installed the failed model of financial (de)regulation in the WTO and which has been blamed for helping to fuel the Global Financial Crisis (GFC).

— The leaked text shows the US and EU, which pushed financial services liberalisation in the WTO, are the most active in the financial services negotiations on TISA. The third most active participant is the renowned tax haven of Panama.

— The rules also aim to ‘discipline’ governments in favor of a light handed and self-regulatory model of financial regulation.

There you go folks!!

“A light handed and self-regulatory model of financial regulation” means one thing: Game Over. The banks will continue to rule the world. Let’s keep navigating, though, so we can protect ourselves.

3. The same states shut down moves by other WTO Members to critically debate these rules following the Global Financial Crisis (GFC) with a view to reform.

— Various WTO Members called for a review of the rules after the financial crisis.

— Subsequent attempts led by Ecuador to secure a debate in the Committee were eviscerated to the point that the eventual discussion in April 2013 was meaningless.

4. They want to expand and deepen the existing regime through TISA, bypassing the stalled Doha round at the WTO and creating a new template for future free trade agreements and ultimately for the WTO.

— The countries that were at the centre of global finance and were responsible for the Global Financial Crisis will be bound to maintain the rules that allowed that to happen.

— The minimal reforms they have adopted post-GFC will become the maximum permitted regulation.

— Several recent IMF papers have referred to the ‘state of denial’ among affluent economies about the potential for further devastating crises if they maintain the current policy and regulatory regime.

5. TISA is designed for and in close consultation with the global finance industry, whose greed and recklessness has been blamed for successive crises and who continue to capture rulemaking in global institutions.

— When the industry’s demands, as expressed in the consultation on TISA conducted by the US Trade Representative in 2013, are matched against the leaked text it becomes clear that they stand to get most of what they asked for.

6. A sample of provisions from this leaked text show that governments signing on to TISA will: be expected to lock in and extend their current levels of financial deregulation and liberalisation; lose the right to require data to be held onshore; face pressure to authorise potentially toxic insurance products; and risk a legal challenge if they adopt measures to prevent or respond to another crisis.

— The biggest danger is that TISA will stop governments tightening the rules on the financial sector.

That is a tsunami folks.

Rather than my standard sign-off to “Navigate accordingly,” in light of this document I would encourage you to . . . GET TO HIGHER GROUND!!

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

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